外商投资企业会计制度.doc

外商投资企业会计制度第一页第二页第三页第四页第五页Chapter 6 Fixed Assets andWork in ProgressArticle 29 Fixed assets of enterprises with foreign investment shall beaccounted for separately and separately disclosed in the balance sheet. Assetsunder finance leases shall be accounted for separately until ownership istransferred. Assets under operating leases shall be recorded in supportingmemorandum books and shall be disclosed in the notes to the accounts.Article 30 Fixed assets shall be accounted for at cost.The cost of fixed assets contributed by the investors represents the amountstated in contracts, agreements, the enterprises application document forincorporation or the statement of examination and receipt of fixed assetscontributed including transportation, loading and unloading expenses, insuranceand taxes payable borne by the enterprise.The cost of fixed assets purchased represents the purchase considerationincluding transportation, loading and unloading expenses, insurance and taxespayable. Cost of fixed assets manufactured and constructed by the enterpriseitself represents actual expenses incurred in the manufacturing and constructionprocess.The cost of fixed assets under finance leases represents the purchaseconsideration stated in the contracts including transportation, loading andunloading expenses, insurance and taxes payable borne by the enterprise. Wherethe purchase consideration stated in the contracts includes interest and handlingcharges, that portion of the interest and handling charges shall be deducted fromthe cost. Such interest and handling charges need not be accounted for separatelyif the value of the fixed assets under finance leases is not substantial and theterm of the lease is not long.The cost of fixed assets donated to the enterprise represents the price ofthe fixed assets determined based on the provisions set out in the secondparagraph of Article 49 of these Regulations, including transportation, loadingand unloading expenses, insurance and taxes payable borne by the enterprise. Forused assets, the rate of depreciation shall be estimated according to thecondition of these assets.Surplus of fixed assets on physical counts shall be determined by thereplacement cost of such assets and their rates of depreciation shall beestimated according to the condition of these assets.Expenses incurred in modifying fixed assets for the purpose of expansion,replacement, renovation or technological improvement may be included under thecost of fixed assets.Cost shall also include installation costs, if any, of the fixed assets.Article 31 Fixed assets shall generally be depreciated using the straightline method. The production or service output method may also be used where thestraight line method is not appropriate.Depreciation of fixed assets shall generally be determined based on the costof fixed assets and the depreciation rate set for each category of fixed assets.Depreciation rates may also be applied on an individual asset basis where thedepreciation rate by category is not appropriate. The rates of depreciation offixed assets shall be determined based on their cost, estimated residual values,which shall generally be not less than 10% of their cost, and their expecteduseful lives.Accelerated depreciation shall generally be calculated using only the doublereducing balance method or sum-of-digits method.Fixed assets shall be depreciated on a monthly basis from the month followingthat in which the assets are used in operation. For fixed assets which are nolonger used in operation, provision for depreciation on such assets shall ceaseto be made from the month following that in which the assets cease to be used.Fixed assets may continue to be used after they have been fully depreciatedduring which time no further depreciation shall be required. Provision fordepreciation shall also cease to be made for fixed assets damaged before the endof their expected useful lives.Where the cost of fixed assets is adjusted for the purpose of expansion,replacement, renovation or technological improvement, depreciation shall becalculated after taking into account the adjusted cost, accumulated depreciationalready provided, estimated residual values and the remaining useful lives. Fixedassets used in construction work during the set-up period of the enterprise maybe depreciated in full on completion of work or by equal installments over theperiod of construction and the depreciation charge shall be included in the costof construction. In respect of fixed assets used during the set-up period but notdirectly related to the construction work, the depreciation charge shall beincluded in pre-operating expenses. Assets under finance and operating leasesshall also be depreciated. Fixed assets, other than buildings, idle for a longperiod shall not be depreciated.Accumulated depreciation shall be accounted for separately and separatelydisclosed as a deduction under fixed assets in the balance sheet. Accumulateddepreciation for fixed assets under finance leases shall be accounted forseparately.Article 32 A physical count of fixed assets shall be made on a regularbasis, at least once every year. Differences between the physical count resultsand book records shall be adjusted for as soon as possible after the reasons forsuch differences are identified. The adjustment shall normally be made before thefinalisation of accounts for the accounting year in which the physical count ofassets is conducted. Any surplus of fixed assets identified on physical countsshall be accounted for as operating income at an amount equal to their cost lessaccumulated depreciation while losses shall be accounted for as operatingexpenses at an amount equal to their cost less accumulated depreciation and anycompensation from person(s) causing such losses or from insurance companiones.Surplus and shortage of fixed assets on physical counts during the constructionperiod shall be included in the related construction cost.Net profit or losses on disposals of fixed assets arising from sale,obsolescence or damage shall be accounted for as non-operating income or expenses.Net profit or losses on the disposal of fixed assets arising during the period ofconstruction shall be accounted for as part of the construction cost.During the set-up period of the enterprise, surplus or shortage of fixedassets on physical counts or on disposals not directly related to anyconstruction work, and profits of losses on disposals of fixed assets as a resultof extraordinary causes shall be accounted for as pre-operating expense.Article 33 Construction in progress of enterprises with foreign investmentshall include preparation work before commencement of the construction, workunder construction, and construction and installation work completed but not yetused in operation. Construction in progress shall be accounted for separately andseparately disclosed in the balance sheet.Where the period of construction exceeds one year, and construction items arenumerous and construction cost is substantial, construction items may beaccounted for separately.Construction in progress shall be accounted for on the following basis:Materials used in provisions set out inconstruction Article 23 of theseRegulations;Equipment to be installed provisions set out inArticle 30 of theseRegulations;payment on account to the actual amount paid;contractorsManagement expenses of the actual managementthe construction work expenses incurred;Construction work under- the direct materials,taken by the enterprise direct labour, directitself mechanicalwork expenses andattributablemanagementexpenses;Construction work under- the amount paid totaken by third party subcontractors andsubcontractors attributablemanagementexpenses;Installation of equipment the cost of equipmentincluding installationcharges, trial runexpensesand attributablemanagementexpenses.Equipment acquired or invested during the set-up period of the enterprisebut not yet installed may also be accounted for as construction in progress.Article 34 Where there is spoilage or damage to the construction inprogress, net losses resulting shall generally be accounted for as part of thecost of construction in progress after deduction of the residual value andcompensation from person(s)causing such losses or from insurance companies. Netlosses arising from spoilage or damage as a result of extraordinary causes shallbe accounted for as pre-operating expenses if the construction is undertakenduring the set-up period and accounted for as non-operating expenses if the assethas already been used in operation.Net expenses arising from trial runs before the asset is used in operationshall be accounted for as part of the cost of construction in progress. Whereproducts produced during trial runs can be sold to third parties, the actual orestimated sale proceeds shall be deducted from the cost of construction inprogress.Article 35 When the construction of an asset is completed and it is used inoperation but the total cost of the asset is yet to be determined, the assetshall be transferred to fixed assets at the estimated value based on the budgetedprice or cost of the work, and shall be depreciated according to the provisionsset out in Article 31 of these Regulations. The estimated value of the asset andits accumulated depreciation shall be adjusted for after the actual cost of theasset is ascertained.Chapter 7 Intangible and Other AssetsArticle 36 Intangible assets of enterprises with foreign investment includepatents, proprietary technology, patents and trademarks, land occupancy rightsand other intangible assets, and shall be accounted for separately and separatelydisclosed in the balance sheet.Intangible assets contributed by the investors shall be accounted for at theamount specified in the contracts, agreements or the enterprises applicationdocument for incorporation including related expenses borne by the enterprise.Intangible assets acquired by the enterprises shall be accounted for at cost.Article 37 Intangible assets shall be amortised by equal installments overthe beneficiary period from the time the enterprise starts deriving benefits fromthe intangible assets or, where there is no specified beneficiary period, overthe estimated beneficiary period.Article 38 Other assets of enterprises with foreign investment include pre-operation expenses, exchange losses during the set-up period, deferred investmentlosses and other deferred expenses to be amortised by installments, and shall beaccounted for separately and separately disclosed in the balance sheet.Pre-operating expenses shall be accounted for based on cost incurred inrelation to business registration fees, wages and salaries, business tripexpenses, staff training expenses, expenses incurred by the board of directors(ora joint management committee. The same definition applies wherever reference ismade to the board of directors.)and other expenses not included in the purchaseor construction of fixed assets or intangible assets.Exchange losses during the set-up period shall be accounted for based on theamounts realized during the set-up period.Deferred investment losses shall be accounted for based on the differencebetween the appraised value and the book value of the investments.Deferred expenses shall be accounted for based on actual expenses incurred.Article 39 Other fixed assets shall be amortised on the following basis:Pre-operating expenses and by equal installmentsexchange losses during over a period of not lessthe set-up period than 5 years from the datethe enterprise commencesoperationDeferred investment losses by equal installmentsover the investmentperiod but not lessthan 10 yearsOther deferred expenses by equal installmentsover the estimatedbeneficiary period butnot less than 10 yearsChapter 8 Current Liabilities,Long Term Liabilities and Other LiabilitiesArticle 40 Current liabilities of enterprises with foreign investmentinclude short term borrowings, payables, deposits from customers (advancedeposits ) and accrued expenses.Short term borrowings, deposits from customers (advance deposits)and accruedexpenses shall be accounted for separately. Payables shall be accounted forseparately where appropriate as bills payable, accounts payable, accrued payroll,tax payable, dividend payable and other payables. Current liabilities denominatedin multi-currencies shall be individually accounted for in their originatingcurrencies.Staff and workers bonus and welfare fund and other funds, which areliabilities in nature, shall be accounted for as current liabilities.Amounts payable after one year from the balance sheet date shall beseparately disclosed under long term liabilities in the balance sheet.Article 41 Long term liabilities of enterprises with foreign investmentinclude long term borrowings, redeemable bonds and amounts payable under financeleases, and shall be accounted for separately and separately disclosed in thebalance sheet.Long term liabilities repayable within one year from the balance sheet dateshall be separately disclosed under current liabilities in the balance sheet.Article 42 Redeemable bonds shall be accounted for based on the face valueof the bonds issued. The difference between the proceeds of issue and the facevalue of the bonds shall be accounted for as the premium of discount on issue andshall be accounted for separately and separately disclosed as an addition to or adeduction from the redeemable bonds account in the balance sheet. Accruedinterest included in the proceeds of issue shall be accounted for as a temporaryreceipt and disclosed under other payables.Premium of discount on the issue of redeemable bonds shall be amortised byinstallments using the straight line method or effective interest method over theperiod to maturity of the bonds and shall be charged against the related interestexpenses.Handling charges paid to financial institutions which act as agents to theissue shall be accounted for as finance charges.Article 43 Other liabilities of enterprises with foreign investment includeexchange difference during the set-up period and income derived from deferredinvestment, and shall be accounted for in the “exchange difference during theset-up period”account and the “deferred investment losses”account respectively.Article 44 Interest accrued on liabilities shall be accounted for in theappropriate period at the actual interest rate paid.Interest directly related to fixed assets purchased or constructed shall beincluded in the purchase or construction cost of the assets before the assets areused in operation or before final accounting has been completed for assetsalready used in operation. Other interest shall be accounted for as pre-operatingexpenses during the set-up period and shall be accounted for as expenses of therelated accounting period after the enterprise has commenced operation.Chapter 9 Investors EquityArticle 45 Investors equity in enterprises with foreign investment includepaid-in capital, capital reserve, general reserve, enterprise expansion fund andundistributed profits, and shall be accounted for separately and separatelydisclosed in the balance sheet.Article 46 Paid-in capital represents contributions by investors inaccordance with the amount specified in the contracts, agreements or theenterprises application document for incorporation.Contributions in the form of cash shall be accounted for at the amountactually deposited into the bank account of the enterprise.Contributions in the form of assets shall be accounted for at the amountspecified in the contracts, agreements, the enterprises application document forincorporation or statement of inspection and receipt of assets contributed.Contributions in the form of intangible assets shall be accounted for at theamount specified in the contracts, agreements or the enterprises applicationdocument for incorporation.Where the paid-in capital booked does not agree with the amount stated in thecertificate of paid-in capital reported by a certified public accountant in China,proper adjustment shall be made in accordance with the appropriate regulations.Article 47 Where capital contributed by investors requires translation intothe reporting currency, the amount debiting to the corresponding asset accountshall be translated in accordance with Article 61 of these Regulations, and theamount crediting to the paid-in capital account shall be translated at theforeign exchange rate specified in the agreement as quoted by the StateAdministration of Exchange Control(hereinafter this exchange rate is referred toas the “official foreign exchange rate”).Where the exchange rate is notspecified in the agreement, translation shall be made at the official foreignexchange rate quoted on the date when the contribution is received.Where enterprises translate the paid-in capital in foreign currency at theofficial foreign exchange rate quoted on the date when the contribution isreceived, and where the currency adopted at the time of registration ofincorporation is different from the reporting currency, and where the capital iscontributed at different times, the capital shall be translated at the officialforeign exchange rate prevailing